Citing regulatory restrictions in its native Norway, Storebrand Investment has announced that during the third quarter, it has set up four hedge funds in Luxembourg aimed at the institutional market.

The four long/short equity funds will add to Storebrand's already established hedge fund presence in the Duchy, where the firm already has active credit, tactical asset allocation and global fixed income hedge funds, according to AFX News.

Storebrand Investments, the asset management arm of the financial services firm Storebrand Group, manages assets totalling NOK159 billion (US$24.5 billion) in mutual funds and client portfolios.

Huns Aasnas, head of asset management at Storebrand, was quoted as saying that the firm decided to establish the funds in Luxembourg because financial regulations in Norway prevent the company from setting up its hedge funds there.

"Currently, regulatory restrictions do not permit us to establish our hedge funds in Norway. But there is some talk of new regulation that may allow this. If this happens, we would like to set up our hedge funds in Norway," he stated.

While Luxembourg is a relative newcomer as a hedge fund domicile, it has nevertheless seen rapid growth in alternative investment fund assets, primarily hedge funds, which more than doubled during 2004 to reach US$18.7 billion by the end of the year.